Deadlocks: Should directors boycott meetings?

THERE can be problematic situations, such as in a shareholders' deadlock, when directors may feel that their best option is to purposely not attend a meeting. This, in effect, means choosing to boycott a meeting.

A common reason for a director to opt not to attend a meeting could be to avoid the unpleasantness of being caught in a heated crossfire.

From a tactical standpoint, directors may collectively decide to be absent so that the mandatory quorum requirements are not met, thus invalidating the meeting proper and preventing a quarrelsome decision from being passed. This effectively creates a deadlock situation before the meeting if the convener is unable to proceed without the requisite quorum. However, even if the meeting proceeds, there could also be a deadlock if there is a prescribed minimum level of voting support required for resolutions on certain matters to be passed and these voting thresholds are not met.